Sunday, June 04, 2006

My Special Shout Out - I See You Too

When the killer flu hit, it came at the worst time, it was in the middle of moving my sister. So given I was in a different enivronment and I was required to be physically active, the flu was worse than normal. While being out for this short period, I had time to reflect. During my time of reflection, I noticed a lot of things occuring here in TX and throughout the nation. I have realized, as a society, we no longer can be silent and it is time to bang pots, march out on the streets, but it is time break the chains that bind us showing our true outrage. So the did flu knocked me down, but it did not knock me out.

I'M BACK!!!

Now for my first victim. Lets see....awww yes....a little Blake Gottesman follow-up. It is interesting to see who comes visiting my little ole blog when you least expect it after writing about Blake's enterance into Harvard's Business School, Harvard's Royal Treatment. Was it Blake? Maybe, but there is a strong possiblity Blake's daddy paid a short visit. So I like to give a special shout out to Blake, Sanford Gottesman (Blake's daddy), the folks at Edminster, Hinshaw, Russ and Associates (one of Sanford's company), the folks at International Finance Corporation, and FEMA.

I am pretty sure Blake or his family are not too thrilled that I come out first in a Google using the following search terms "blake gottesman + mba" or "Blake Gottesman gmat"; which is how they found my site.

Blake isn't the only one with government connections, it seems, Blake's daddy Sanford Gottesman, also had some good fortune come his way. But who is Sanford Gottesman?

Gottesman owns a real estate development company called The Gottesman Company in Austin, TX, but he also serves on the Board of Directors of the Overseas Private Investment Corporation (OPIC), a government corporation. According to OPIC's web site, to serve of the board, "all members must be appointed by the President and confirmed by the Senate." OPIC's mission to foster economic development in new and emerging markets, by investing US businesses overseas. OPIC supports projects that encourage "political stability, free market reforms and U.S. best practices."

OPIC lowers U.S. economic output by transferring resources from productive uses to politically favored ones. OPIC beneficiaries are highly concentrated in terms of companies and industries. The majority of OPIC's largesse goes to a small group of large multinational corporations and overwhelmingly supports a few highly profitable industries such as oil and gas, financial services, and power.

OPIC activity is also highly concentrated geographically. A handful of troubled emerging market economies has received 60 percent of OPIC support in the past four years. The agency's finance and insurance for those countries represented only 3 percent of their total foreign direct investment. In other countries that are unable to attract foreign investment because they do not have the proper policy environment, OPIC support undermines development by rewarding the lack of policy reform.

OPIC's record does not live up to its advocates' rhetoric. Congress should abolish this font of international corporate welfare.

There is more to OPIC than people realize. Two years ago, The Nation ran an article about ReBuilding Iraq 2, Risky Business by Naomi Klein. ReBuilding Iraq 2 was "a gathering of 400 businesspeople itching to get a piece of the Iraqi reconstruction action," writes Klein.

Klein further writes:

Just when the mood at ReBuilding Iraq 2 couldn't sink any lower, up to the podium strides Michael Lempres, vice president of insurance at the Overseas Private Investment Corporation (OPIC). With a cool confidence absent from the shellshocked proceedings so far, he announces that investors can relax: Uncle Sam will protect them.

A US government agency, OPIC provides loans and insurance to US companies investing abroad. And while Lempres agrees with earlier speakers that the risks in Iraq are "extraordinary and unusual," he also says that "OPIC is different. We do not exist primarily to generate profit." Instead, OPIC exists to "support US foreign policy." And since turning Iraq into a free-trade zone is a top Bush policy goal, OPIC will be there to help out. Earlier that same day, President Bush signed legislation providing "the agency with enhancements to its political risk insurance program," according to an OPIC press release.

Armed with this clear political mandate, Lempres announces that the agency is now "open for business" in Iraq, and is offering financing and insurance--including the riskiest insurance of all: political risk. "This is a priority for us," Lempres says. "We want to do everything we can to encourage US investment in Iraq."

However, that was not the worst of part of it. Klien continues:

Lempres doesn't seem too concerned about these possible "expros[priates]," but it's a serious question. According to its official mandate, OPIC functions "on a self-sustaining basis at no net cost to taxpayers." But Lempres admits that the political risks in Iraq are "extraordinary." If a new Iraqi government expropriates and re-regulates across the board, OPIC could be forced to compensate dozens of US firms for billions of dollars in lost investments and revenues, possibly tens of billions. What happens then?

Expropriate (expropriation) is similar to eminent domain. Expropriation is the act of removing the owner from the control of said property. In other words, if the Iraqi government decides to take full control of the pipelines and decide all pipelines are no longer going to be privately owned, the company who owned would be royally screwed, but OPIC will come in like a knight in shining armor and save the company by compensating them. Only one small problem, before OPIC can pick the nice greenbacks from the fruitful money tree, somebody has to plant the seed or a fully grown money tree so OPIC can compensate the lose acquired by the businesses. Klien writes:

Who bails out OPIC? "In theory," he says, "the US Treasury stands behind us." That means the US taxpayer. Yes, them again: The same people who have already paid Halliburton, Bechtel et al. to make a killing on Iraq's reconstruction would have to pay these companies again, this time in compensation for their losses. While the enormous profits being made in Iraq are strictly private, it turns out that the entire risk is being shouldered by the public.

In an administration that doesn't believe in conflict of interest, what are the chances Gottesman's business part of this deal?

Is Jr. trying to win daddy's approval and run the family business? It does look pitiful to write in your bio page that your previous job was being Dudya's lackey. Oh well, it will remain a mystery for now.